Japanese Crypto Exchange Raises $320M to Recover Funds After Major Hack

DMM Bitcoin, a Japanese cryptocurrency exchange, is raising 50 billion yen ($320 million) to compensate users for losses incurred during a recent hack.

Following a $320 million hack involving Bitcoin, DMM Bitcoin announced on June 5 its plan to recover the stolen funds by acquiring an equivalent amount of Bitcoin from its group company, DMM.com.

Ongoing Investigation and Assurance

In the statement, DMM Bitcoin assured its users that it would carefully manage the planned Bitcoin purchases to minimize market impact. The exchange also mentioned that an investigation is still underway to uncover the details of the unauthorized outflow of 4,503 BTC on May 31. DMM Bitcoin expressed deep regret for the incident and its impact on customers, pledging to keep the public informed of any new developments as they arise.

Securing Recovery Funds

To finance the compensation for affected users, DMM Bitcoin secured a loan of five billion yen ($32 million) on June 3. Additionally, the company plans to raise another 48 billion yen ($308 million) on June 7, followed by an extra 2 billion yen ($12.8 million) through subordinated debt financing on June 10. This financial support from DMM.com will ensure the necessary funds to “guarantee customers’ Bitcoin holdings.”

A Major Hack

The DMM Bitcoin hack ranks as the eighth-largest cryptocurrency hack in history. The largest incident to date is the March 2022 Ronin Network hack, where validator nodes were exploited, resulting in a $620 million theft. In response, Ronin significantly enhanced its security measures, introduced $1 million bug bounties, and doubled its validator nodes to prevent future incidents.

DMM Bitcoin’s efforts to recover and secure funds demonstrate the exchange’s commitment to addressing the aftermath of this significant security breach and protecting its customers’ assets.